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Today’s billionaires are yesterday’s millionaires from the vantage point of gold. Prior to 1933, the dollar was defined as approximately 1/20 of an oz. of gold. In 1935, it was redefined as 1/35 of an oz. of gold.
In 1971, the tie to gold was severed completely and the dollar was left to “float.” As of the close of trading today (June 19, 2019) it had “floated” up to about $1360 per oz.
If we divide $1 billion by $1360, we get 735,294. That’s the number of ounces of gold it takes at $1360 per oz. to equal $1 billion. Prior to 1933, each of these ounces was equal to $20. From 1935 to 1971, they were each equal to $35.
Here’s a picture of a 1 oz. US gold coin, known as the “Double Eagle.” Notice how it is stamped UNITED STATES OF AMERICA TWENTY DOLLARS. At today’s closing price of gold, a billion dollars is worth 735,294 of these coins.
At their face value of $20 per coin, these coins represent $14,705,882. So our “billionaire” is worth less than $15 million in these gold coins. At a gold price of $35 per oz., he’s worth $25,735,294, i.e., less than $26 million.
Nevertheless, ignorant politicians see billions bobbing up and down in the economic system and believe they represent fabulous wealth. Wealth that they can squander in creating “well-paying jobs” while they destroy our ability to produce.
It’s only a question of time before we have trillionaires and greater poverty than we do now. Will the politicians ever learn that the poverty and the billions/trillions are both the result of their policies of money creation and the unchecked growth of government it allows?
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